Restaurant listings and food delivery service Zomato is in discussions to acquire India-based online grocery retailer Grofers at a valuation of about $750m, the Economic Times reported yesterday.
The prospective acquisition would be an all-share deal, according to two people with knowledge of the developments. The talks were initially reported by Entrackr on Monday without the prospective valuation.
Grofers’ largest investor, telecommunications and internet group SoftBank’s Vision Fund, could invest $100m to $200m in the merged business once the deal closes, people close to the matter told ET.
Founded in 2013, Grofers runs an online platform where customers can shop for a wide range of food, household and personal care products that are available for delivery in 27 Indian cities.
The company recently formed a grocery delivery partnership with Zomato subsidiary Zomato Market, and a factor in the negotiations could be recent developments related to Covid-19 which have led to restaurants closing and customers more focused on preparing food at home.
The deal would follow about $520m in funding for Grofers, which most recently secured $20m from media group Bennett Coleman & Co in November 2019.
Grofers raised $10m from Abu Dhabi Capital Group in July 2019, adding to more than $200m from Vision Fund, financial services firm KBT, Tiger Global Management and Sequoia Capital in May.
The 2019 series F round valued the company at nearly $1bn, up from a reported $425m when Vision Fund led a $60m series E in February 2019 that also featured Tiger Global and Sequoia Capital.
Vision Fund had already invested $40m to lead Grofers’ $61.4m series D round in early 2018, which included Tiger Global and Yuri Milner, at a $300m valuation.
The company had previously received $120m in a 2015 series C round led by SoftBank and backed by Apoletto Managers and existing investors Sequoia and Tiger Global.
